CHICAGO (Dow Jones)--Tyson Foods Inc. (TSN) announced the departure of President and Chief Executive Dick Bond Monday, the second high-profile casualty of the difficulties facing the U.S. meat industry.
Bond, one of the sector's most outspoken executives, will be replaced immediately on an interim basis by Leland Tollett, a Tyson veteran returning for his third stint as CEO.
Tyson shares, suspended at $9.32 pending the announcement, were trading down 5.6% at $8.83.
U.S. meat processors have been grappling with depressed demand and pricing for chicken, and the lingering impact of high commodity prices on animal feed costs.
This has forced one market leader into bankruptcy and heralded talks with lenders across the industry to restructure debt accumulated through expansion and acquisitions.
Tyson declined to comment on whether Bond's departure was triggered by lenders, who last month agreed to relax some loan covenants.
Last month, the chief executive of Pilgrim's Pride Corp. (PGPDQ), the largest poultry producer, resigned under pressure from board members days after the company filed for bankruptcy production.
Bond, 61, became CEO in 2003, and was credited with diversifying the business with a balance between beef, pork and chicken sales, and expanding higher-margin packaged products.
However, investors had become unnerved by Tyson's reluctance to cut production as dramatically as rivals amid a glut of poultry supplies.
"After seven years of helping lead or leading the world's largest meat company, I have decided it is in both my best interest personally, and the best interest of the company for me to move on and pursue other interests," Bond said in a statement.
Bond joined Tyson when the company bought beef producer IBP Inc. in 2001 and has served as CEO since 2006.
Last month, the company secured extra breathing room from lenders amid an industry downturn that could leave the world's largest meat processor by revenue nursing a fiscal first-quarter loss.
Tyson agreed to pledge "substantially all" of its assets in return for more flexibility on the covenants attached to a $1 billion revolving loan.
The company said at the time that the amendments "shows our lenders are willing to work with our company and have confidence in our ability to follow through on our key strategies."
Credit analysts had been concerned that Tyson could bump up against an existing leverage ratio comment of 3.9 through the end of next year. The ratio was last lifted in September.
The new deal extends the ratio to 4.5 through its first two fiscal quarters, falling to 4.25 in the third quarter and 3.5 after that.
Tyson, which raised fresh capital earlier this year, has been partially sheltered by the strength of its beef and pork operations.
-By Doug Cameron, Dow Jones Newswires; 312-750-4135; doug.cameron@dowjones.com
(Kerry Grace contributed to this article)